War for talent resumes as salaries climb

Starting salaries have leapt up to their highest level since the recession
began despite the overall number of jobs vacancies declining in July, new
figures have shown.

Female eningeers can take home 26pc less pay than their male counterparts, the ONS said.Photo: Corbis

By Louisa Peacock, Jobs Editor

7:20PM BST 05 Aug 2010

In the strongest sign yet that the ‘war for talent’ has returned to the jobs market post-recession, employers are being forced to pay premium rates for good staff despite remaining nervous about the economic outlook, according to experts.

The survey by the Recruitment & Employment Confederation and KPMG showed starting salaries for permanent staff jumped from 53.9 in June to 56.1 last month – the highest since April 2008. Anything above 50 represents an increase. Year-on-year, wages have grown by 26pc, the report showed.

However, the number of permanent jobs available fell from 60.7 in June to 60.2 last month. While the figures still represent growth – they register above 50 – it is the slowest rate of expansion seen in nine months, the survey found.

Separately, the Reed Jobs Index, also published this week, recorded a decline in vacancies in July compared to last month, but showed salaries had remained “steady” for the third month running.

Penny de Valk, chief executive of the Institute of Leadership & Management, said: “Supply and demand effects aren’t just about quantity but also quality. The war for talent is not over. Good people are still hard to find and companies will pay a premium for them.”

She added: “We may have been too slavish about sending everyone off to university and bypassing the powerful vocational and professional routes which employers so often desire.”

The REC/ KPMG reported highlighted several skills that were in short supply, including accountants, HR professionals and business analysts, on top of sectors that were traditionally hard to recruit for, such as IT or engineering.

Ms de Valk said companies were willing to pay a premium for managers who had a track record in taking on “major changes”, to help employers through uncertain times.

Human resources (HR) chiefs across sectors agreed the ‘war for talent’ was back on following a period where staff had been willing to take pay cuts or work shorter hours just to stay in a job.

Christian Armstrong, HR director at Guoman & Thistle hotels, said: “Vacancies are declining as employers look to the uncertainty of the marketplace in the second half of the year.” But, he said: “In certain specialist occupations, the market has become more competitive in the fight to attract and retain the most talented staff.”

Some employers in the engineering and technical sectors were crying out for specialist skills, even despite nearly 2.5m people being out of work, experts said.

Rachael Henderson, HR director at building services company Norland Managed Services, said she was becoming “increasingly frustrated” by the lack of desire among younger people to pursue a career in the engineering environment.

“We have an ageing workforce and in 10 years time, I really fear that the few technically qualified people around will be able to dictate any [employment] terms they wish as companies fight to recruit them.”

She cited a recent example where an apprenticeship candidate at the company pulled out at the last minute because he had got through to the next round of the pop-star wannabe TV show The X Factor.

“This is an extreme example, but trying to persuade the younger generation that technical professions can offer just as stimulating a career as the media or the dotcom industries is very difficult when they live in a media-driven culture,” she said. “How can I compete with Simon Cowell?”